Wotif announces record result-Full year profit up $7 million reaching $58 million

Wotif.com Holdings Limited (Wotif) today announced a 14% lift in profits, returning the Group to record-breaking form and beating profit guidance provided early in May.

Brisbane – 22 August 2012, Wotif.com Holdings Limited (Wotif) today announced a 14% lift in profits, returning the Group to record-breaking form and beating profit guidance provided early in May.

Wotif’s result outperformed at all levels - with total transaction values up 5%, revenues up 5%, operating profits up 11%, and after tax profits up $7 million (14%) reaching an all time high of $58 million. Wotif has more than quadrupled each of these metrics over the seven years since listing on the ASX.

Operating Australia's #1 online travel agency (generating revenues of more than $145 million and selling around one-in-every ten hotel room nights in Australia), Wotif's entry into the flights market has produced strong and profitable growth. With a 30% lift in the total value of flights sold, flights now represent 9% of all travel transactions (by value) processed by Wotif. Wotif's success in cross-selling flights to its significant Australian customer base augurs well for its recently launched holiday homes range.

• Mobile site and app for iPhone deliver 14% of visits and 9% of room night sales for Wotif.com

• 13.5 cent final dividend (fully franked), taking full year distribution to 25 cents (up from 22 cents last year)

FY12 Actual

FY11 Actual

% Change from Prior Corresponding Period

Total Revenue

$145.3m

$138.3m

↑5.0%

Profit Before Depreciation, Amortisation and Taxation

$86.3m

$77.8 m

↑11.0%

PBT

$81.3m

$71.6m

↑13.6%

NPAT

$58.0m

$51.0m

↑13.8%

Commentary

The Wotif Group this morning reported record-breaking performances across the field with total transaction values, revenue, operating profit and after tax profit out-performing all prior periods. Over the last 7 years, Wotif has more than quadrupled each of these measures.

Lifting its after tax profit by $7 million to $58 million (up 14%) saw the Group exceed the profit guidance it provided early in May of $55.5 to $57.5 million. The result was driven by a 5% lift in total transaction values, a 5% lift in revenues and an 11% lift in operating profit (being profit before tax, depreciation and amortisation).

"This result sees a return to form for Wotif in an operating environment not markedly different to that which we experienced in FY11 and every bit as challenging.

The standout in our result has been the strong performance of Wotif’s flights offering which is still in its infancy. With Wotif selling $110 million of flights in the year (up 30%) this business now makes up 9% of our transactions by value.

The year saw us continue to sell around one-in–ten of all hotel beds in Australia. This was a very credible performance given the continuing appetite of leisure travellers for offshore travel, fuelled by the strength of the dollar. It also highlights that there is still substantial distribution in Australia that we have not yet captured.

Mobile was another big feature this year, with our mobile site and our recently launched app for iPhone accounting for 14% of Wotif.com's site visits and, more importantly, 9% of our room nights sold.”

In considering new initiatives launched by Wotif in the year, Cooke commented:

"We are really enthused by our launch of holiday rentals on Wotif.com in June. This is an exciting new product range with holiday homes being a perfect extension to our current leading accommodation offering. We have taken a different approach to what is currently in the market in Australia by only offering instantly bookable holiday rentals – this makes for a more time-efficient experience for customers. While we have assumed a slow build-up into this market, our aspiration is for holiday rentals to be a meaningful contributor to revenues in two years’ time.”

In discussing the outlook he said:

"There is no sign that the dollar is heading "south" anytime soon and we are expecting this to be “situation normal” for the medium term. Against that backdrop we think it is reasonable to assume that our international flights business will continue to be a beneficiary of the cycle and accommodation bookings for business on wotif.com (which tends not to be impacted by currency) will remain robust. The corollary is the likelihood that leisure sales of Australian accommodation will remain unremarkable. With key leisure markets experiencing softness there will be great opportunities for consumers to score exceptional deals. This is where Wotif will do what it does best – getting compelling value in front of the biggest pool of Australian and New Zealand customers at the world’s lowest distribution cost for our hotel partners.”

With the benefit of the strong result Wotif’s Board confirmed a final fully franked dividend of 13.5 cents which takes the total dividend for the year to 25 cents (compared to 22 cents last year). This sees the Group returning 91% of profits to shareholders.